QYOU Media Inc. (QYOU) Earnings Call Transcript & Summary

Good morning, and good evening, everyone, wherever you may be in the world. Thanks for taking time out to join us today for a presentation on both Q2 and also more importantly, where we're going in Q3 and beyond. I'll be joined today by Raj Mishra who's on the call. He'll be talking about a number of the things that have been happening over this year in India and where things are started there. But what I wanted to first do was talk briefly about Q2. We've got 30 minutes allocated for the call today. So we're going to blast through these various presentations. But the purpose really is to not just talk about Q2, but also give shareholders a glimpse into why we remain so bullish on where we're headed as a company overall. So with that said, I'm going to reduce this a bit here and proceed. There we go. So Q2, I want to get the elephant in the room. I know that people may not have been blown away by our results, but I think you need to frame it in the context of what's happened historically for us as a business, along with where we're headed overall as a company. Obviously, we were extremely happy that we had 27% year-over-year revenue growth. Our real target is 30%. So it's slightly below where we would like, but the previous quarter was only 22%. So we're headed in the right direction. And we think when everybody hears about what's happening in Q3, which actually still has a month to go, people will be extremely excited about the direction we're heading. So we've made a decision that we're not providing any formal on guidance yet on Q3, specifically because there's still 1/3 of the quarter to go, and there's a lot that's happening as we speak. But rest assured, we're extremely confident that directionally, what's happened for us as a company in the past or the second half of the year. Last year, actually, we doubled the revenue in the first half of the year and the second half of the year from plus or minus, really about 1/3 of our revenue happened in the first 6 months and 2/3 of our revenue happened in the second 6 months, we're expecting something similar to happen here in 2026. And certainly, what's happening in Q3 is supporting that pattern in a big way. So why is that happening? Well, a big part of it is that we've been building and growing our capabilities, both from a technology point of view, an AI-driven point of view, but also from a manpower point of view, and the capabilities perspective in terms of what we can do with campaigns and how much we can make them more robust and what we refer to as enterprise level, meaning larger and more sustained going forward. A big piece of that over the first 6 months has also been what we announced in Q1, which was [ Q Amplify ]. I'll talk in a little bit more detail momentarily about what that's all about. But [ Amplify ] is basically built around the concept of doing media buying to boost the campaigns that we're working on and to drive more viewership on the platforms. That's become a very, very important piece of the creator economy business and the social media marketing. And so we think we've made a lot of advancements in that area in the first half of the year. And as I said, they're starting to bear fruit, right now in Q4 -- Q3 rather. In addition to that, we've bolstered our sales and marketing efforts. We've improved the visibility of our business overall. And again, we're starting to see the results of that as we move ahead. One of the other big aspects of what's happened in Q2 and really in the first 6 months of 2026, is that we've increasingly created integration between our operations in North America and India. One of the challenges of the business right now is that there's a lot of margin pressure I spoke about this on the last call. As the business has become more sophisticated and has larger budgets attached to it, there is more scrutiny of that by the partners that we have and the larger companies that we're dealing with. And so we started to really leverage the ability to use India as a more effective cost center for us in terms of the execution of these campaigns. There's been a tremendous amount of effort in that in Q2 that's taken place and is beginning to roll out further this quarter and expect it to roll out even further next. And what that's really given us is the opportunity to be able to not only work more effectively because in a strange way, it allows us almost to be on the clock, 24 hours a day, in terms of our work capabilities across these projects. But in addition to that, it's created some cost benefits that are in particular helping us in the North America marketplace. So that's something that you'll see us continue to do as we go forward and continue to benefit from. And finally, one of the big things that we did as we moved into new offices in India, Raj will touch on that in his presentation. But a big piece of that has been building out what we refer to as Chatter studios. And we now have our own studio inside the office in India. Again, this is already becoming a key part of what we're doing in terms of the campaigns that we're able to run and manage, along with our ability to create more and more influencers that we represent through the India business. So while the financial results were not as strong as we, frankly, as we would have liked them to be. We're still reasonably happy with what happened. And a lot of people have asked me about why we didn't have a net profit and what all this investment capital is and why we're doing that. Again, I think you'll see the fruits of those efforts and those investments as we move forward in the second half of this year, and we're extremely confident that that's the case. The other piece that I really wanted to talk about today is just the creator economy in general. I spoke about this on the last call to some extent. But the acceleration of that is probably second only to what's happening in the world with AI and the acceleration of AI around the world and the investment capital that's going into that. The creator economy in general right now is exploding in growth. And there is not 1 single brand on the planet Earth that has not, in 2026, increased the allocation of what they're spending in the social media marketing space, but also the size of the budgets and the increased importance of social media marketing. This should not really come as a surprise to anyone. We all know we carry our phones around in our hands all day long, whether you have kids or not or whether you do it yourselves. We know the degree to which whether you're a doom scroller or whether you just spend a lot of time on platforms like Instagram, YouTube Shorts, TikTok, et cetera, these platforms now for -- not just marketing and running effectively commercials on them to sell you products and services, but also becoming transactional locations to actually purchase things continues to go like a rocket ship. And so we think that we're an incredibly well-positioned spot right now. It's also why we think that the valuation, frankly, that we have for this business is just ridiculously small, given the overall size and scope of the market that we're in. And so we are committed to continue to invest in it. We're committed to continue to grow in it. And you'll see a lot of news coming from us and a lot of people have said, where is the big announcement, where is the big announcement, where is the big announcement. We've held back on a number of things due to legal issues and some other issues that we've had to deal with, but you can rest assured that in the second half of 2026, there will be a lot of news coming out of the combined QYOU Media Chatterbox business. that I think will underscore what we see as the opportunity for ourselves. I spoke a minute ago about QYOU Amplify. The same thing is true in India in terms of our increased capabilities to be able to what's known as Boost or move more viewership behind the content that we're creating. Spark ads that you see at the top there is a particular TikTok version of that where you're able to take existing content and drive more viewership into that. As the business itself is maturing and is the number of people that see content, engage in it, the data that surrounds that becomes increasingly important, our capability to be able to not just find the right creators, find the right formats, produce the cool content but be able to elevate that content in terms of viewership on a very, very targeted and specific basis has increased as a huge priority for all advertisers and everybody who's spending money in this area. So if you think about something like the commercial or even print or television rather or print advertising over the years and the importance of being able to get on to the right programs with the right distribution if you were in print. Same thing is happening here in the social media marketplace, and it's becoming increasingly sophisticated, and we have become increasingly sophisticated in our ability not just to deliver it and make the distribution happen, but also be able to report on it, measure it and report to our clients about why it's been effective and how. An area that we've been looking at for a while and that we're continuing to explore more so in India right now, again, because we represent creators there that we don't in North America, although we're looking at that as well, is the area of these platforms becoming direct commerce vehicles. So in other words, you're not just going to Amazon to buy your new hair product or your new whatever it might be a piece of clothing, where we're all familiar with the concept of TikTok Shop and YouTube Shopping, et cetera, and these live streams that are coming transactional. GMV, by the way, stands for gross merchandise value. So in other words, there's the amount of merchandise that's been sold year-over-year on these platforms. Everything is growing like a weed. Singapore, which is 1 of the leading territories in the world, has been 1 of the cutting-edge places where it's exploding there, but we're seeing the trend spread across other areas, including U.S., India, Europe, Latin America, et cetera. So this is something that we see as an opportunity for us, particularly in India where we represent creators and the transactional nature of what's happening in social media is only going to continue to grow massively in the coming quarters and years. This one, of course, those of us who have been around QYOU for a while since we started on television, find ironic, but many of you are probably aware that the fastest-growing television channel on flat screen connected TVs, smart TVs today is YouTube. And so while all of us are watching all this content on our phones where smart TV proliferation continues to grow, YouTube is the fastest growing of any of those channels. It's free, it's easily accessible. And so the number of hours that people are spending on YouTube now exceeds any other single channel in the universe of channels that are being delivered through smart TVs and connected TVs. Shopping hours on that as we -- as I mentioned a second ago, and transactional hours are continuing to grow. And so the net of all of this is extremely exciting for us and something that, again, we're looking to leverage going forward. The other thing we're seeing is that there is the concept of always on. We've been working on this for a chatter for a while, chatter social was really built to create always-on capabilities in India for brands so that we were servicing what they were presenting on Instagram and YouTube, et cetera. In a sustained and ongoing way with a plan that wasn't about a one-off clip, but that was about effectively a channel that was being managed. This is happening increasingly as brands are looking to creators to sort of be associated with their brand on a sustained basis. And so again, because of how we're positioned in the marketplace because of what we've been doing is an OG in this arena, there's a lot of opportunities that have been coming up for us to leverage this both in North America and in India, and we see this being a place where we're going to continue to grow going forward. Obviously, we're international. This specifically is talking about regional languages in some of these places. We're already established, obviously, in India, and Raj will talk a little bit about our regional work that we're doing there. We've -- the Middle East, as I spoke about last time, has been slowed a little bit by the Gulf war or the Iranian war rather, but the -- we're starting to unlock more and more business in the Middle East, and we continue to see growth there as we go forward in the second half of the year. Raj himself has deep experience with TikTok in Southeast Asia and Latin America. So a lot of what we're going to be doing around language expansion, using AI, being able to dub into different languages is kind of a blue sky opportunity for us in the future. We get a lot of questions about AI, obviously, virtual influencers and sort of fake things that are created is a concern, but we really view it as an asset. We've been able to work on AI capabilities that Jace and the teams internally themselves have created to give us the opportunity to create things faster to be able to get feedback in terms of what we're doing to be able to use it as a tool to increase our ability to create great content. So it's not something that for us internally, AI is a threat, so much as it's an opportunity that's created about how we can create more work better, faster and still have it carry with it the authenticity of being created by humans and have the human touch that's allowing it to be authentic in terms of its presentation. Finally, creators, as I mentioned, are becoming businesses. Obviously, the biggest ones, the Mr. Beast and the Dhar Manns of the world, et cetera, have already made huge inroads into being able to create real brands with multiple prongs of their capabilities and sort of a global basis. This is also happening, however, at a micro level and a nano level. So there are smaller influencers with less -- it could have 100,000 followers that have targeted audiences where they're able to create very, very strong relationships with those audiences and being able to market a lot of different products and services to them. We see this also as a huge blue sky opportunity for us as we roll forward. And so you'll see more things happening in the area of us using creators and associating with our creators to create extended brand opportunities for us going forward. So where do we see ourselves within all of this? We touch every piece of this food chain. That's really what it boils down to. And it's not so much about being a one-stop shop as it is about having an opportunity to have capabilities in any 1 or 2 or 3 of these areas if it's specifically needed or to have a fulsome response to what the market is looking for. And so as the creator economy has continued to grow and become mainstream, we see with the 10 years that the companies have been in the businesses independently in North America and India to merge those capabilities more going forward and leverage it as a global opportunity for the company. The net of all this for us, of course, is that -- we know that we need to continue to deliver financial results that are positive, and we expect to do that on an annualized basis. It's a very big challenge for us to operate quarter-to-quarter because our industry doesn't really operate on a quarter-to-quarter basis. So internally, we manage it more from an annual basis. But we think the annual results of 2026 are going to be something that people will be extremely excited about, including when we announce what's happening in Q3. And so we look forward to sharing that information with you along with some other excitements, the so-called big announcements that we've been -- have not made yet that you'll be seeing in the coming weeks and months. So with that, I'm going to conclude my screen share, and I'm going to turn it over to Mr. Raj Mishra coming to you from India.

Thanks, Mr. Marvis. Hi, everyone. Good to have you all with us. It's been a while, and we thought it's a perfect opportunity for you guys to get a dipstick on what we've been up to in Chatterbox India, what we are particularly excited about and how the future holds for us. So without laying further, let me really dive in. So yes, I mean, just a quick genesis. We've particularly evolved from becoming -- being called as a traditional influencer marketing agency to more of a full stacked influencer creator led marketing platform. Our motto is to help brands creators and craft across culture and social media and additive across India and the global markets. That's what we've been building over the last many years. Sorry. Yes, my bad. All right. So this gives you a glance about the verticals, which we have at Chatterbox. So these are not just verticals for us. These are crafted revenue streams, where we get it to the Gen Z through [indiscernible]. We have our Chatterbox representive division, where we represent a lot of top-tier talent. We've got [ Palobox ], which caters into the regional Tier 2 and Tier 3 [indiscernible] India. We've got Chatter social, which again, like Curt mentioned, it's our social media vertical where we craft branded strategy for brands who want to really dive into the entire [indiscernible] ecosystem. Last but not the least, we've recently launched [ Tata Studio ], where we have increased our capabilities and more in the market, where we come as a full stack infer marketing platform to curate substantial value proposition through our post-production capabilities too. So that's something which we're particularly excited about. This slide gives you an idea about the scale what we've garnered over the last 6 to 8 months. We've curated about more than 1,000-plus campaigns, integrated a lot of different years of creators. We have catered to not just India but international brands, curated about multiple thousands of content pieces across different categories. So -- the hustle has been pretty much on. Again, we'd obviously host this presentation for you guys to kind of have a look and feel of the campaigns, what we've curated. But in short, our entire integrated ecosystem sort of help us enable to derivate end-to-end marketing solutions across the brands, where we combine all our capabilities to try and see whether our proposition really fits in the brand's goal. And if it does, then how can we really ensure that they get the best ROI on their investments what they're spending on us. Again, as represents the core of our business, where we managed top tier talent, our idea is not just to have a very brick and mortar way of managing the talent but also empower these guys and create more opportunities for these guys to build into the entire social media ecosystem. So we have fueled dreams of getting people at 10 [indiscernible]. We've got people to go in Disney Cruises, got people to launch their own books by partnering with Amazon. So a lot of interesting work that the team has been put in for our [ represent ]. And again, these are certain highlights for our other divisions where we've garnered into the Gen Z and the localization strategy of the Tier 2, Tier 3 [indiscernible] including that of the studios. So a lot of the content piece is what we've shown has been a derivative of our capabilities, what we really most about in the market. And again, like Curt mentioned about the cross-pollination between businesses. So we've done really big in serving international clients because we have capabilities across different borders and not just in the India and the U.S. So we've partnered with a lot of brands who wanted to expand out of India and into different markets. So through our connect in those localized markets with curator campaigns and not just serve them for once, we have cracked 7 out of our 10 deals have been retained or campaign. So there's definite value which our brand sees in the way we curate and execute campaigns by combining QYOU and Chatterbox capabilities in different is for us. Again, this is something we work with 2 marquee brands in India. Mahindra Finance is 1 of the top financial conglomerates and Pacologica. Again, as a multi-format brand where they wanted to target a different subset of community, and we kind of help curate that as well. Again, this is about empowerment. This is about getting our creator evolve from being just call an influencer, but more great IPs around them. So we've imported a lot of dreams. We empowered a lot of opportunities for these guys across different brands we work with. So a lot of these off-line touch points give them an opportunity for on-ground engagement with a lot of the community development aspect and the brand experiences also is something which is pretty noticeable as we keep curating these campaigns. Again, for us, we've identified the sweet spot here is not just to serve the creators and the brands but also create IPs or of creators, which are really talk about the propositions, which is what the next level of strategy for a creative would anyway be -- so we've done a few marquee creator IPs, which we've already started a couple of ones I want to quickly highlight 1 of that. There's the 1 you to see on the left. It's an ongoing travel and storytelling opportunity with 1 of our creators where the idea is to get him travel across the country and engage with different subsets of communities there. we've already garnered about 100 million, close to 100 million views on the entire IP. The idea is to keep pollinating such IPs across different subset of creators so that -- there's a large value proposition, which we drive back to the community and not just the brick-and-mortar, we are working with them. Again, these are certain PR awards, which we've empowered for our creators. The idea was, again, to get them right there where the top of mind recall subset is really high for operators who we manage. And as you see, someone's been facilitated in Comic-Con. Someone's got an Impact award and recently got facilitated or ideas to again create those add-ons, which we can as a company so that our creators are really happy and satisfied with the value proposition, which we've been derivating for time. Just a quick note on this. These are particularly 30-plus creators, which we unloaded over the last 6 months, but our asters already crossed about 100. This is very core to our business. But again, 1 thing you would see with the number of fallers count. We follow the strategy of catching them early when we can. So our idea is to catch emerging creators. We've got a nick of creating great quality content. We've got a great potential to make it big. Our idea is to incubate them under our ecosystem, form them, guide them with content strategy and create rockstars out of scratch. So that's the moat which we have in the market, and we are continuing to follow that trend as well. Again, I kind of pause this video, this is again, not just a new office. We've had -- this is a material development in the entire culture of Sharebox to sort of panel more cross collaboration between our teams and have a larger space, which sort of envisions what we want to do as a company. We've got upgraded into a new work space. So I'm just going to quickly play the video. So as you can see, we just recently moved in here. It seems pretty high, and it creates a more cross collaborative culture amongst everyone. And I'm going to clear with you after the next -- after the slide about this talks about our Studio 2, but you all could get a glance in this with you as well. That's -- this is something which we've been building over the last 6 months. And finally, to see it come live. It was really exciting for everyone in the company and everyone's pretty much dialed in to really utilize this space as we move forward. And yes, as we realize that our capabilities are a metric of what we've been doing in the past, plus what we can do in the future. So we've launched Chatter Studios where we've expanded beyond our production capabilities with a very dedicated studio, which brings in different dynamics to the screen, in a much more snackable format. So our teams and creators get a space to really leave the opportunity what they have at the disposal and our idea is to not just create content, but again, shoot and postproduced and everything under 1 roof. So -- and why we are particularly doing it because there's a lot of appetite for studio-led content from brands increasingly in India and in global markets. So you want to really have a high priority setting as we move forward for this. Again, this is a slide which I really love. As we have already completed about 10 years in the market. So there's a lot of ways we engage with brands, but what we really thought to do something unique is we turn our own entire company as a creator. So what we do is we have a very inorganic way of partnering with brands where our own employees are curating slice of live content. So the authenticity and the engagement with the content derivates for people who decipher that as a part of the community development aspect is really, really something which the brands love. And our idea is to create a new revenue stream out of our own employees because they are creators in themselves after being in the industry for so long. That's something which is really interesting. And again, yes, last but not the least, this is just a reflection of the hard work which the team have been putting in on ground. And this is a testimonial to the fact that we have been consistently at least stable in the market with regards to being recognized for the good quality work what we've been putting in. And yes, with that note, I'd say that this is just the beginning for us as we scale, as we move forward, like Ed mentioned, we want to really double down on all our capabilities and try and win the market because we already have all the attributes to do that. It's just about the timing of everything. And every information, what's being a material information and what we've been building on, I think, would be privy to all of you pretty much soon. With that note, I pass the mic back to Mr. Marvis.

Okay. I'm not sure what I did here, but I eliminated my video. So No, we can see you. you can't see me. Okay. Okay, good. So thanks, Raj. I appreciate that. I mean I think, as I mentioned, we have actually a hard stop in 3 minutes for the call today. There will be another call that will be taking place sometime between now and the end of September. And along with some announcements that are coming out then, everybody also knows that I'm always reachable via e-mail at Curt with a ccrt@qyoutv.com. And those of you who have e-mailed me in the past know that I do everything possible to give you a fulsome response in 24 to 48 hours. So feel free to do that if you have questions. I think the main theme of today is that I had an unhappy investors and put up a note or whatever and say, okay, these guys would just keep losing money and created a lifestyle business. And I was saying to Jace yesterday, I said, hey, it's a lifestyle business. If you want to work 7 days a week and be under pressure constantly to deliver. We're working our asses off, and we're not just doing it for ourselves. We're doing it for those of you who have invested money behind us, our shareholders. We take our responsibilities seriously and to heart. And we also want to do it for ourselves. I mean, Raj and I have had successful careers. We've been successful guys. This company is nowhere near where we think we can take it, nowhere near. And while we believe that it's horribly undervalued now with where we are today, it is what it is. And so our goal is to continue to leverage everything that you've seen, both of what's happening in the macro creator economy currently on a global basis, but also just some of the things that Raj was pointing out, specifically in India. And we fully intend to take these capabilities as a launch pad. And as I've said, not to tease it too much, but I think you'll see how that's starting to happen in real time in the quarter that we're currently in. And so that's our goal. We challenge ourselves to meet that every single day. Our goal is to do great work and create greatness in everything that we're doing. And so that's where we're headed as a business. And for those of you who have been on the ride for a long time, -- as I've said over and over again to you guys, no 1 is more frustrated than we are in the share price and the valuation. But we are absolutely positively convinced we can change that going forward, and that's what we're going to keep doing every day, every night, including Saturday and Sunday. So thank you all so much for your support. Again, send me e-mails directly. If it's for Raj, note that, and I will get it over to him. -- and appreciate your support and your time today. So thanks very much. Have a good day.